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Medicare Drug Program News
Hole in Medicare Drug Coverage has Seniors Seeing
Red; Companies Green
Community pharmacists say revenue booming
at top providers of Part D Plans
 August 8, 2006 – Pharmacy Benefit Managers are
reporting double digit profits and forecasting even greener returns,
while seniors are hitting the "doughnut hole" in Medicare Part D coverage
and paying the entire cost for prescriptions, says the Association of
Community Pharmacists Congressional Network. The group says it does not
understand how members of Congress think it is sound policy for private PBMs to make such massive profits on a government run program at both
patients' and taxpayers' expense.
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There are about 37 million people enrolled in the
benefit. Many beneficiaries who signed up for Medicare drug plans in
January have hit the doughnut hole, which is the "jackpot period for
PBMs," says ACP*CN.
Beneficiaries pay a $250 deductible then 25% of
prescription costs up to $2000. When total yearly spending by the
patient and the plan together reaches $2250, coverage stops. The patient
must then pay the total cost for prescriptions until out of pocket
expenses reach $3,600 before coverage resumes.
The country's largest providers of stand-alone
Medicare Part D drug plans, United Health and Humana Inc., reported
record second quarter earnings for 2006 because of the new benefit.
United Health's revenue jumped 57% in the second quarter of 2006 from
$11.3 billion for the same period in 2005 to $17.92 billion and its 2006
revenues "were significantly affected by ... the commencement of
Medicare Part D," according to United Health Group's earnings report in
July.
"Independent community pharmacies across the nation
are seeing increasing numbers of seniors in the "no coverage" phase of
Medicare Part D and are expressing shock over the cost of their
prescriptions," said Mike James, Vice President, Governmental Affairs,
ACP*CN.
"PBMs have been enriching themselves since January
on this program and now patients in the doughnut hole are struggling to
pay prices for prescriptions which are much higher now than in December
'05. This is wrong," continued James.
Humana Inc. witnessed a 52% surge in second quarter
revenue up from $3.55 billion in the second quarter of 2005 to $5.41
billion in 2006.
"These increases were primarily the result of
higher enrollment in the company's Medicare Advantage plans and new 2006
revenues from stand-alone PDPs (prescription drug plans) for Medicare
beneficiaries," Humana state in its earnings report.
Humana's president and CEO, Michael B. McCallister,
added the company expected to grow revenues 50% this year, "as we ...
expand our Medicare business into a long-term growth engine."
Not only are beneficiaries facing the reality of
higher priced prescriptions but also the threat of losing access to
their independent community pharmacy of choice due to PBMs low and slow
payments to pharmacies for Medicare prescriptions.
Both United Health and Humana operate their
Medicare D plans through their PBM businesses. When Congress reconvenes
this fall, ACP*CN says it believes it is imperative for members to
correct these skewed realities in favor of beneficiaries.
About source: Association of Community
Pharmacists Congressional Network
Founded in 2002 and based in Raleigh, NC, the
Association of Community Pharmacists Congressional Network consists of
15,000 independent pharmacists nationwide dedicated to serving the
communities in which they live. ACP*CN is dedicated to the survival and
growth of the independent pharmacy owner, who often times is the only
pharmacy operating in rural towns across America, where access to
pharmacies is extremely limited. Our network of pharmacists do more than
just fill prescriptions, they counsel patients on medication use and
many times act as the front line healthcare provider for individuals and
families who can't afford or don't have direct access to a doctor.
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